February 2017 – Net Worth Update

Since that first report, we have seen our net worth grow by 20.7%! That is an increase of almost $90,000 in less than 2 years. Not too bad.

If I hadn’t had to buy a new car last month … we would have increased our net worth by well over $100,000.

Over the past 2 years (less the 2 months) … we have seen our assets start to really grow, while at the same time most of our liabilities decrease.

When you are building wealth and growing your net worth … that is exactly what you want to see. Grow your investments (i.e. assets) while lowering your expenses (i.e. liabilities).

The only time our liabilities actually went up was when we took on the debt of our new car payment. The good news is that we are paying 0% interest.

How We Track Our Net Worth

Before we move on to reviewing our latest net worth numbers, I wanted to point out that we are using our Personal Capital account to do most of the work.

We are tracking our net worth through this free account. This tool has made it possible for us to easily track our net worth at a moments notice.

Note: This post contains affiliate links.

Personal Capital

I highly recommend checking out Personal Capital and setting up a free account. It is the best tool available to help track your net worth and can even help with your spending.

Now on to our latest net worth update –

February 2017 Net Worth

As of February 22nd, 2017 – our net worth is $524,911.38.

In the past, we didn’t really want to post net worth updates every month. Instead we opted for posting updates every 2 or 3 months. Since there are so many moving parts to calculating ones net worth, it seemed pointless to me to go through the exercise every month.

Well … things change … and now we plan to provide an update every month.

Why did we change our mind? We have been really trying to focus on saving a lot more of our income each month in order to invest it.

By reviewing our net worth once a month, I feel that it will help us stay motivated with our goal to save (and invest) more.

Here is our most recent update, compared to our last net worth post in January.

Our net worth in February 2017 increased by an astounding 2.6%compared to January (2017). That is an increase of over $13,000 in just 1 month!

The majority of the increase is a direct result of recent stock market gains.

As you can see … the stock market is on a tear lately. All those gains have trickled down to our net worth totals (in a good way).

We are also constantly investing new money and reinvesting gains back into our investments.

The value of our investments rose by 3.2%.

Overall, the health of our portfolio looks strong as we have built a solid cash flow machine.

Cash

Our current cash includes all of our checking and savings accounts. We don’t usually carry a high cash balance and like to move it into the stock market to purchase income producing assets. However, it is also important to have some cash on hand in order to cover unexpected expenses.

January 2017 – Cash = $4,540.70February 2017 – Cash = $4,605.01

Cash Change = +$64.31

We saw a very little difference in our cash since last reporting.

There were several larger bills that we needed to pay off like our home owners insurance and car insurance for our new vehicle.

Home Value

I have never been a big fan of reporting on our home value in our net worth. However, it is one of our largest assets so we need to include it.

We are currently using the Zillow estimate on our home, which is calculated directly through Personal Capital. This asset will likely see a bunch of ups and downs each time I report our net worth.

Liabilities

There are 3 main liability categories that we will report on. The first and largest is our mortgage balance. Then we have our credit card balances … which is how we pay for almost every purchase we make.

The last category is our car loan(s). We just took on more debt back in January, when I purchased a new car.

My old car died … so we ended up buying a new car that gets great gas mileage. I commute about 60 miles per day to work … so I need something that doesn’t waste a bunch of gas.

While my wife and I didn’t really want to take on additional debt, it was time for me to replace my old car as the ongoing maintenance costs were rising.

Mortgage Balance

One month at a time, we are slowly paying down our mortgage principal.

We have a 30 year mortgage on our home with a rate of 4.375%. That isn’t too bad of a rate, so we don’t really pay any extra on the mortgage each month.

Every few months, we consider refinancing … but it never seems like the savings are worthwhile. So we continue to pay our mortgage every month.

In the past, we had paid extra on our mortgage each month to try and knock years (and interest) off the loan. Based on our low interest rate, we now opt to put this money to work for us in the stock market. I like to think we can earn a dividend yield higher than our mortgage rate (4.375%).

Car Loan(s)

We recently took on a lot more debt after we bought a second car … which I will refer to as “car loan #2”. Back in January, my 16-year old vehicle finally died and I needed reliable transportation.

Fortunately, I was able to purchase a new vehicle that gets over 35 mpg with a 0% financed loan.

As far as our “family car”, we have a very low rate and are on year #4 of the loan. We refer to this as “car loan #1”. Since our rate is 1.56%, we haven’t really considered paying extra on it. We would rather take any extra money and use it to invest instead of paying down this specific debt.

The balance on both of these loans should drop a decent percentage each month going forward. Since we have low interest rates on both loans, we are paying a bunch of the principal off with each payment.

Note – We will make our first payment on car loan #2 in a few days. I did not get the correct balance updated in our January 2017 net worth update … which explains the slight decrease.

Credit Card Balance

Since we are not paying any extra money on our mortgage and our car loan has such a low rate, our credit card spending is the biggest area for improvement.

Note – We have always paid our balance off every month on our credit cards.